Law: Income Tax Ordinance, 1979

Section: 23

Law: Pakistan Penal Code, 1860

Section: 294B

(a) Income-tax Ordinance (XXXI of 1979)---S. 23--Penal rode (XLV of 1860), S. 294-B--Disallowance--Legal and professional charges--Money spent as professional charges in defending Chairman of assessee firm for offence under S. 294-B, Penal Code, which had allegedly been committed by him, held, not an expenditure for purpose of business- -Fact that criminal proceeding: were subsequently withdrawn or Chairman was acquitted or discharged would make no difference so far as admissibility of expenditure was concerned--Relevant factor was not subsequent withdrawal of criminal case or acquittal or discharge of an accused but whether expenses were admissible at point of time when they were incurred for income-tax purpose. C.I.T. Andhra Pradesh v. Dhanraj Girji Raja Narasingh Girji (1973) 91 I T R 544; General Tyre and Rubber Company v. C.I.T. (Central) 1986 P T D 52 and C.I.T. v. Payarasingh 1986 P T D 26 ref. Spofforth and Prince v . Golder 26 T C 310 rel. (b) Income-tax Ordinance (XXXI of 1979)- ---S. 23--Criminal Procedure Code (V of 1898), Ss.249 & 494-Withdrawal from prosecution--State acting through Government has right and privilege of remitting or commuting sentence and such order passed by Government not justifiable--Withdrawal of a case, held, stood on different footing--Court of law could go into reasonableness of order of withdrawal of a prosecution. Mir Hassan v. Tariq Saeed and 2 others P L D 1977 S C 451 rel. (c) Income-tax Ordinance (XXXI of 1979)-- --S. 23-Expenditure--Business purposes--Difference between an infraction of law committed in carrying on a lawful business and an infraction of law committed in a business inherently unlawful and constituting normal incident of it exists. C.I.T. v. Alpha Insurance Company Ltd. P L D 1981 SC 293 ref. (d) Income-tax Ordinance (XXXI of 1979)-- ---S. 23--Surcharge---Amount of taxes payable lesser than declared income--Commissioner of Income-tax arriving on finding that amount of taxes payable could be treated as retained income and that no surcharge could be levied on it but directing levy of surcharge to be restricted to 10% of tax on difference of income retained and income assessed-­Direction of…

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